Pentagon officials said the market was not the target of a coalition attack, but that the deaths and damage could have been caused by the Iraqis themselves.

Television images from regional networks showed crumbling buildings, burnt out cars and injured people from the Baghdad bombing, saying the Iraqis blamed coalition bombs for the damage.

U.S. military officials could not yet say what caused the fatalities and damage, Maj. Gen. Stanley McChrystal said at a Pentagon news briefing on Wednesday.

McChrystal said coalition forces did not target any sites in the area of the marketplace. He said the damage could have been caused by a surface-to-air missile fired by the Iraqis or by fallout from Iraqi anti-aircraft artillery.

U.S. Central Command Wednesday said it destroyed nine surface-to-air missile sites around Baghdad in the early morning.

McChrystal said that attack was separate from the marketplace incident but added, "We can't make any assumption. We do know we did not target in the residential district."

"We do regret the loss of any civilian life in any conflict," McChrystal said.

Brig. Gen. Vincent Brooks, U.S. deputy director of operations, said earlier that he did not know if a coalition strike hit the area but that if it did, it would have been a mistake.

Allied forces "have a very, very deliberate process for targeting" that is unlike any other in the world, Brooks told the daily U.S. Central Command news briefing in Qatar.

Before the Baghdad market incident, Iraq had reported 78 civilian deaths since Monday as a result of bombing raids. CNN cannot independently verify Iraq's figures.

Brooks said the Baghdad market incident will be investigated.

He said it was important to keep in mind that coalition forces had observed Iraqi fighters forcing Iraqi civilians to march out in front of them.

Coalition forces also had observed the placement of Iraqi military supplies and troops near civilian structures, he said.

Brooks said he did not "accept the premise ... that civilians have been killed by coalition bombs."

"Iraqi civilians (are) being marched out in front of irregular formations while they are firing," he said.

"Iraqi civilians are being killed on the battlefield by Iraqis. I can't make that point more strongly than I've just done."

He added: "We can't say that those are our bombs. We've seen people wearing civilian clothes strapped with bombs. We've seen a number of things that shows what meets the eye is not always true."

U.N. Secretary-General Kofi Annan said Wednesday he was "increasingly concerned" about civilian casualties in Iraq.

He urged the warring sides to take "all necessary steps" to protect civilians.